🛡️ Choosing the Right Limits for CGL and Property Insurance 🇨🇦
When purchasing Commercial General Liability (CGL) or Property Insurance, one of the most critical decisions is setting the appropriate coverage limits. Too little coverage can leave you facing devastating out-of-pocket costs, while too much can result in unnecessarily high premiums. So, how do you find the right balance?
⚡ CGL Limits
- Standard starting point: Many businesses begin with $2 million in liability coverage.
- Why it matters: Liability claims for bodily injury or property damage can easily exceed $1 million—especially with rising medical, repair, and legal costs ⚖️.
- Higher-risk industries: Construction, manufacturing, and professional services may require $5 million or more, often to meet contractual obligations.
🏢 Property Limits
- Coverage should reflect the full replacement cost of your building, equipment, and inventory—not just market value.
- Factor in inflation 📈, labour costs, and potential supply chain disruptions that could significantly increase rebuild expenses.
- Include business interruption coverage to protect income and expenses if operations are halted.
📌 Why It Matters in Canada
With weather extremes—wildfires 🔥, floods 🌊, storms 🌪️—and cross-border liability exposures, Canadian businesses must carefully assess risk. Setting the right limits safeguards your balance sheet and ensures you meet contractual requirements.
✅ The Takeaway
Work with a broker who understands your industry, contracts, and risk tolerance. Choosing the right limits today ensures your insurance truly protects your business when it matters most.
👉 When was the last time you reviewed your liability and property limits?
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